Patrick Industries (NASDAQ:PATK) and Fortune Brands Home & Security (NYSE:FBHS) are both construction companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, earnings, analyst recommendations, institutional ownership, profitability, valuation and risk.
Valuation and Earnings
This table compares Patrick Industries and Fortune Brands Home & Security's revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
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Patrick Industries | $2.34 billion | 0.90 | $89.57 million | $3.85 | 22.89 |
Fortune Brands Home & Security | $5.76 billion | 2.45 | $431.90 million | $3.60 | 28.32 |
Fortune Brands Home & Security has higher revenue and earnings than Patrick Industries. Patrick Industries is trading at a lower price-to-earnings ratio than Fortune Brands Home & Security, indicating that it is currently the more affordable of the two stocks.
Dividends
Patrick Industries pays an annual dividend of $1.12 per share and has a dividend yield of 1.3%. Fortune Brands Home & Security pays an annual dividend of $1.04 per share and has a dividend yield of 1.0%. Patrick Industries pays out 29.1% of its earnings in the form of a dividend. Fortune Brands Home & Security pays out 28.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Patrick Industries has increased its dividend for 1 consecutive years and Fortune Brands Home & Security has increased its dividend for 1 consecutive years.
Risk & Volatility
Patrick Industries has a beta of 2.41, indicating that its stock price is 141% more volatile than the S&P 500. Comparatively, Fortune Brands Home & Security has a beta of 1.66, indicating that its stock price is 66% more volatile than the S&P 500.
Profitability
This table compares Patrick Industries and Fortune Brands Home & Security's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
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Patrick Industries | 3.50% | 15.75% | 5.23% |
Fortune Brands Home & Security | 8.36% | 22.37% | 8.68% |
Insider & Institutional Ownership
88.5% of Patrick Industries shares are held by institutional investors. Comparatively, 86.6% of Fortune Brands Home & Security shares are held by institutional investors. 7.6% of Patrick Industries shares are held by insiders. Comparatively, 1.5% of Fortune Brands Home & Security shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Analyst Recommendations
This is a breakdown of current ratings and target prices for Patrick Industries and Fortune Brands Home & Security, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
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Patrick Industries | 0 | 1 | 3 | 0 | 2.75 |
Fortune Brands Home & Security | 1 | 4 | 10 | 0 | 2.60 |
Patrick Industries currently has a consensus target price of $73.50, indicating a potential downside of 16.87%. Fortune Brands Home & Security has a consensus target price of $90.1875, indicating a potential downside of 11.48%. Given Fortune Brands Home & Security's higher probable upside, analysts plainly believe Fortune Brands Home & Security is more favorable than Patrick Industries.
Summary
Fortune Brands Home & Security beats Patrick Industries on 10 of the 16 factors compared between the two stocks.